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Economic Report: Durable-goods orders get big auto boost in February, but show early signs of coronavirus damage – Forex Brasil

Economic Report: Durable-goods orders get big auto boost in February, but show early signs of coronavirus damage

Manufacturers in the U.S. and around the world are getting slammed by the coronavirus.

The numbers: Orders for durable goods posted the biggest gain in February since last summer, but aside from a spike in demand for autos, the report also showed early signs of damage to the economy from the growing threat of the coronavirus.

Orders for durable goods jumped 1.2% last month, mostly because of big increase in bookings for new cars and trucks. Bookings declined for most other products, suggesting that worries over the coronavirus were already taking a bite out of business.

Excluding transportation, durable-goods orders dipped 0.6% in February, the government said Wednesday. Durable goods are products made to last at least three years.

What happened: Orders rose nearly 2% for new cars and trucks, generating basically all of the increase in February. That was the largest gain in eight months.

A closely followed measure of business investment dropped 0.8%. Investment has been weak for a while and likely to tumble for at least the next few months as the nation struggles to contain the coronavirus.

Big picture: The decline in orders in February for most products aside from autos might be a hint of what is to come. Orders and investment in most industries are expected to decline sharply if the U.S. sinks into recession as widely expected.

Most economists don’t expect a recovery to begin until mid-summer at the earliest, but it will depend on how well the U.S. and governments around the world limit the viral outbreak.

What they are saying? Orders for durable goods “will likely see sharper drops in the coming months as the bigger impacts of COVID-19 on the economy are felt,” said economist Andrew Grantham of CIBC Capital Markets.